The Government has moved to make it easier for Maori to build houses on ancestral land by offering to guarantee mortgages under certain conditions.
Kainga Whenua loans by KiwiBank will be guaranteed by the Crown through Housing New Zealand.
Housing Minister Phil Heatley says traditionally it has been difficult for Maori to build on multiple-owned land because it cannot be sold. That makes it impossible for banks to meet their usual mortgage security requirements.
To qualify for the Kainga Whenua loan of up to $200,000 all land owners must agree on the project and the borrower must earn less than $85,000 per annum and intend to live in the house fulltime.
KiwiBank chairman Jim Bolger says the announcement is a tremendous step forward and has broken a long-standing barrier to the use of Maori land.
The Government will guarantee up to 180 loans this year - although Mr Heatley does not expect that many houses to be built in the first year of the scheme.
Housing New Zealand chief executive Lesley McTurk says there is strong interest from Maori in developing housing on collectively owned land.
Dr McTurk says many Maori trusts are well organised around housing matters and have clear aspirations for their people. She says interest in housing on multpile-owned land has been brewing for decades and the KiwiBank loans will remove a significant impediment.
However, a housing adviser for iwi says the loans scheme is mere tinkering and leaves a frustrating system a long way from where it needs to be.
Ricky Houghton, of He Korowai Trust in Kaitaia, helps people apply for loans and grants and says a 50-year mortgage and a deposit would still be needed by the poorest who face a hopeless situation.